In Kazakhstan, one of the Russian regions, the program Berry Valley was developed. Graduates of Kazan State Agrarian University, who participate in this program, have to get a subsidy of 1.5 million rubles (each applicant). The association of farmers of Tatarstan is going to support this initiative. The farmers are going to grow mostly raspberries, currants, strawberries for internal needs of Tatarstan.
The company Prisma, owned by Finnish holding S-Group, and the company Intertorg in the North West region of Russia (retail chains Narodnaya 7Ya, Idea and Spar) are going to combine purchase departments. First of all, it concerns the essential commodities. Retailers believe that development plans on cooperation will keep the profitability of the business, as well as diversify the range of products.
X5 Retail Group, a leading Russian food retailer, and A&NN Investments ltd, one of biggest privately-owned investment groupings, announce the acquisition by X5 Retail Group of 100% stake in SPAR Retail, owned by A&NN Investments Ltd. SPAR Retail operates 26 stores (previously – under the “SPAR” brand) in Moscow (11), Moscow Region (7) and Vladimir (8). The transaction has been approved by the Russian Federal Antimonopoly Service.
The average selling space of the acquired stores ranges from 400 sq m to 1,600 sq m. The majority of the acquired stores will be integrated into the “Perekrestok” supermarket format, with only a few stores to be rebranded as “Pyaterochka”.
The Company currently operates 1,300 Pyaterochka proximity stores and over 200 Perekrestok supermarkets in Moscow and the Moscow Region as well as 12 Pyaterochka stores in Vladimir.
Organic growth remains the key growth priority for X5. At the same time, the Company does not rule out the possibility of opportunistic local acquisitions to the extent they add value to the business, are in line with the Company’s strategy and its management and financial capacities and do not negatively impact X5’s on-going operations.
The Russian Central Bank has announced an interest rate cut of 150 base points. That means the interest rate will be 12.5% from May 5 onwards, with the interest rate being 14% now. With this measure, the Central Bank is looking to stimulate economic growth. The bank is adjusting the interest rate for the second time this year. The rouble has been on the rise after the significant decline late last year, and the economy is also recovering. According to figures, the GDP, corrected for seasonal influences, decreased by 2.5% in January. The economic growth amount to -1% in February, and this growth figure had halved in March. The inflation is also decreasing slightly, amounting to 16.5%.
The Russian Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) has approved the regulation that will allow the import of North Korean fruits and vegetables to Russia, said the head of the Department for the Development of the Far East, Alexander Galushka. “We agreed to arrange the mutual recognition of certificates for the delivery of fruits and vegetables, vegetable products and seafood from North Korea to Russia and from Russia to North Korea,” he said.
Galushka held talks with the Minister of Foreign Economic Relations of Pyongyang, Li Ren Nam. “This is an important step, which will allow us to increase the volume of trade between our two countries,” stated the Russian representative. In early March, Russia and North Korea announced 2015 as the year of “bilateral friendship”, to be celebrated with political, economic and cultural exchanges. It is a sign of the close relationship that has developed between the leaders of the two nations, which are currently subject to international sanctions.
For Moscow, the benefits are mostly economic. Last year, the Kremlin wrote off $ 10 billion of a total 11 billion Korean debt and announced that the remaining 1 billion would be invested back into the country.
Russian investors have agreed to pump $ 25 billion into the country’s railway system, as well as other infrastructure projects. Private Russian companies will also deal with the reconstruction of the electric grid of North Korea.
Argentine president Christina Fernandez de Kirchner and Russian president Putin signed an agreement on further economic cooperation, and cooperation in the energy sector, with Russia investing in hydroelectric stations and nuclear power plants. According to analysts, the Kremlin is working on improving relations with Latin America, in order to compensate for the consequences of the Western sanctions. Argentina, in turn, is looking for ways to restructure debts with American hedge funds.
The Russian Ministry of Economic Affairs proposes the removal of a number of products from the embargo list, instead of looking for ways to give Greece and Hungary access to the Russian market again. By removing a number of products from the embargo list, trade with these countries can be resumed in a straightforward manner. This way, Russia can prevent the violation of WTO rules. In connection with this plan, peaches, strawberries, mandarins, nectarines and cherries are named as products that could be allowed.
Alexander Tkachev was appointed new Russian agricultural minister. Tkachev is to strengthen food production after Russia reacted to Western sanctions by banning food imports from the EU and US.
“We need to fill our market with our own products, the products of domestic producers, and we need to do it quickly, to ease pressure on the food market, decrease prices and so on,” Putin said at a meeting announcing Tkachev’s appointment. The 54-year-old minister replaces Nikolai Fyodorov, who was being moved to an advisory role in the Kremlin.
Russia banned Western food imports until August 2015 after the European Union and United States accused it of supporting separatist rebels in eastern Ukraine and subsequently imposed sanctions.
Putin said the food ban was a good opportunity to improve Russia’s agricultural industry. However, domestic producers had neither the capacity nor the right quality to replace food from abroad. This caused an increase in food prices.
Moscow is now pinning its hopes on Tkachev, who has been serving as the governor of Krasnodar since 2001. The region produces nearly 12 million tons of wheat every year, contributing more than 10 percent to Russia’s wheat exports.
Russian State Duma has adopted the first draft law which completely prohibits the import and cultivation of any agricultural products containing genetically modified organisms (GMO) as of April 24. The deputy head of the Russian Ministry of Science and Education Nataliya Tretiyak reported the only exception will be made for scientific and research studies.
GMO products need to be registered according to the new law
The draft law also creates a system of expertise of imported production on the presence of GMO. All production containing genetically modified organisms should be registered and included in the special database. The new law will affect the part of import supplies of feedstuffs, as so far in Russia 12 breeds of GM-corn and 6 breeds of GM-soybeans have been approved.
“If we are speaking about absolute figures then we are talking about 2 million tonnes of soybeans and 53,000 tonnes of corn” stated Tretiyak. Russia has been almost completely using GM soybeans and corn as raw materials for compound feed production.
Tougher penalties needed for breaking the new GMO law
At the same time, a number of members of the Parliaments called to implement more tough liability for subject which will violate the new rules. The draft law provides fines of maximum RUB 500,000 (US$ 10,000), which according to experts is very low. “We should take into account that the profit from cultivation GMO crops in Russia exceeds the profit from raising non-GMO production” commented Parliament member Vladimir Fedotkin.
Plans to introduce simplified procedure are to start in May in the territories bordering Russia, according to the General Administration of Customs of China. Interfax also quoted a statement from Zhang Chuntszyao, chairman of the Association of Applied Economics, Heilongjiang Province, stating similar actions.
The goal will be to simplify administrative procedures and transfer powers to the lower levels of customs control. Entrepreneurs are expected to be able to select a location for processing and filling.
“The company’s customs and brokerage services will have the right to register in one place, but legalizing documents of declaration in different places. Companies, which have set up branches in the region, will be able to make declarations in the region,” Chuntszyao said.